24 July 2018

Global economic growth prospects continue to provide a supportive backdrop to markets, although ongoing geopolitical tensions and rising protectionism have dampened investor confidence and remain a threat. We continue to expect US dollar interest rates to rise gradually, which, despite margin pressure, is likely to support net interest income in Global Wealth Management.

In addition to typical seasonality factors in the third quarter, market volatility remains muted overall which is usually less conducive to client activity. Funding costs related to long-term debt and capital instruments issued to comply with regulatory funding and liquidity requirements will be higher than in the previous year, but should be broadly stable compared with the second quarter.

As in the first half of the year, our diversified business model should help us make continued progress towards achieving our strategic and financial targets.